Cashew processing halts at Palasa

Members of the Palasa Cashew Manufacturers' Association have stopped cashew processing operations for 12 days from July 12.

"Due to a shortage of cashew nuts arrivals in the Palasa market, which is the biggest cashew production centre in Andhra Pradesh, cashew producers are taking advantage of the situation and have increased the prices abnormally. But cashew kernels prices have not increased in the market commensurately and we are going to lose heavily if we continue to procure the cashew nuts at these prices," S Murali Krishna, secretary of the association, told Business Standard.

"To overcome this situation, the association has decided to close down the processing units up to the July 24. Depending on the situation we will take a decision about running the units after July 24," Murali Krishna said.

During the initial period of the last cashew season, cashew nuts were available at prices ranging between Rs 2,200 and Rs 2,300 per bag (each bag contains 80 kgs), whereas during the current season processing unit operators have purchased nuts at between Rs 2,700 and Rs 2,800 per bag.

Now the nut prices have zoomed to Rs 3,300 per bag. If our members continue purchasing the nuts the prices will go up further, he said.

At the same time cashew kernel prices have not gone up in the market.

"We have sold the kernels at Rs 210 per kg when the nut prices were hovering around Rs 2,700 per bag. At present, we are selling kernels at between Rs 210 and Rs 215 per kg even though the nut prices have gone up to Rs 3,300 per bag. Due to this the industry is losing between Rs 200 and Rs 300 in processing every bag of nuts," he said.

Palasa cashew processing units have a processing capacity of between 180 and 200 tonnes of nuts per day.

At present, only 40 to 50 tonnes of nuts are arriving at the market place and because of this nuts prices have increased.

Some of the cashew processing unit operators are trying to import some quantities of cashew nuts from other countries, but this year, the import prices are more or less same compared to local prices, Murali Krishna said.